Basel II: New Banking regulation Seminar

Seminar Outline:

Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations. The Basel accords are a series of recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision (BSBS). The name for the accords is derived from Basel, Switzerland, where the committee that maintains the accords meets.

Basel II improved on Basel I, first enacted in the 1980s, by offering more complex models for calculating regulatory capital. Essentially, the accord mandates that banks holding riskier assets should be required to have more capital on hand than those maintaining safer portfolios. Basel II also requires companies to publish both the details of risky investments and risk management practices. The full title of the accord is Basel II: The International Convergence of Capital Measurement and Capital Standards.

The purpose of this seminar is to explain the core concepts involved in Basel II, and compare and contrast advantages and shortcomings of Basel I. We will identify the main risks encountered by the banking sector and pinpoint Basel II limitations.

The seminar will be organized as follows: I-              Introduction to capital adequacy II-            First Basel Capital Accord: 1.     Basel I Basics 2.     Basel I Limitations III-           The New Basel Capital Accord (Basel II): 1.     Objectives of Basel II 2.     The three-pillar regulatory structure a.     Pillar 1 - minimum capital requirements §  Credit Risk §  Operational risk §  Market risk b.    Pillar 2 - supervisory review c.     Pillar 3 - market disclosure IV-           Basel II limitations V-            Conclusion.

ALAOUI HASNA Saturday 11 June at 11.00 Open to All